If Ziggy Company Concluded That an Investment Originally Classified as Held

question 52

Multiple Choice

If Ziggy Company concluded that an investment originally classified as held to maturity would now more appropriately be classified as available for sale, Ziggy would:

• A)Not reclassify the investment, as original classifications are irrevocable.
• B)Reclassify the investment as available for sale and immediately recognize in net income any unrealized gain or loss on the reclassification date.
• C)Reclassify the investment as available for sale and immediately recognize in accumulated other comprehensive income any unrealized gain or loss on the reclassification date.
• D)Need to restate earnings, as the original classification was in error.

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Definitions:

Conscious Activity

Actions or tasks performed while one is aware of their surroundings, thoughts, and feelings.

Observable Behavior

Actions or reactions of an organism, typically in response to external stimuli, that can be seen and measured directly.

Mental Processes

Internal cognitive functions that are involved in perceiving, thinking, understanding, and deciding.

Wilhelm Wundt

Wilhelm Wundt, often regarded as the father of modern psychology, was a German psychologist who established the first psychological laboratory in Leipzig, Germany, where he focused on the study of consciousness through introspection.